China Construction Bank contributes to a RMB 8 billion syndicated loan to Beijing Tsinghua Unigroup Capital Management to facilitate Tsinghua Unigroup's acquisition of a 100% stake in Linxens (Linked to Record ID#104611, #104622, and #104623)

Project narrative

In July 2018, a syndicate of four banks — the Industrial and Commercial Bank of China (ICBC), Credit Suisse AG, Deutsche Bank, and Natixis — entered into a €1.5 billion EUR ($1.75 billion USD) syndicated bridge loan agreement with UNIC Shine Capital (Hong Kong) Limited (a Hong Kong-incorporated wholly-owned subsidiary of Beijing Unigroup Liansheng Technology Co., Ltd., a subsidiary of Tsinghua Unigroup Ltd.) to facilitate its acquisition of a 100% stake in French chipmaker Linxens from CVC Capital Partners for a consideration of €2.2 billion EUR ($2.6 billion USD). This loan carried a maturity period of 12 months; ICBC contributed €200 million EUR to the loan syndicate as captured by Record ID#104611. Credit Suisse was the sole coordinator, mandated lead arranger, and bookrunner. Linxens is a Paris-based French chipmaking company that develops smartcard components for consumer, medical, and industrial applications; it specializes in microconnectors, radio-frequency identification (RFID) antennas, and inlays. Linxens produces approximately 800 million RFID transponders per year and employed over 3,000 staff members worldwide. UNIC France Holdings S.A.S. — a France-incorporated special purpose vehicle (SPV) wholly owned by Luxembourg-incorporated UNIC Strategy A S.à r.l, which is owned by UNIC Shine Capital (Hong Kong) Limited — would acquire 100% of the shares in Financière Lully A S.A.S. (a company that owns 100% of Financière Lully D S.A.S., which owns and controls the core assets of the Linxens Group) and convertible bonds issued by Financière Lully B S.A.S. (a wholly-owned subsidiary of Financière Lully A S.A.S.) as the structure of the acquisition. The acquisition was signed on June 28, 2018. It was apparently completed in July 2018, but only announced on December 28, 2018. The acquisition was not announced for over a month until Reuters broke the story. French regulators approved the acquisition on the grounds that as the chips were "passive", i.e. non-strategic components and not completed semiconductors. As the acquisition excluded the Linxens' U.S. operations, the Committee on Foreign Investment in the United States (CFIUS) did not have authority to review it. On March 27, 2019, a syndicate of five banks — the Beijing Branch of Export-Import Bank of China, the Beijing Zhongguancun Branch of the Agricultural Bank of China (ABC), China Construction Bank (CCB), Industrial Bank, and Bank of Beijing (BOB) — entered into an approximately RMB 8 billion syndicated loan agreement with Beijing Tsinghua Unigroup Capital Management Co., Ltd. (a Chinese holding company and wholly-owned subsidiary of Tsinghua Unigroup Ltd.) to facilitate its acquisition of Linxens. This loan carried a maturity period of 84 months (seven years). The proceeds were used by the borrower to replace (refinance) the €1.5 billion EUR bridge loan. The Beijing Branch of China Eximbank served as leading bank, loan agent bank, and security agent. The loan agreement contained a change of control clause. This loan was secured by (i.e. collateralized against) a first-priority equity pledge by UNIC France Holdings S.A.S. of all its owned shares in Financière Lully A S.A.S. pledged to China Eximbank on February 17, 2019 and then finalized on March 27, 2019 in a Financial Securities Account Pledge Agreement. Record ID#104622 captures China Eximbank's contribution. Record ID#104623 captures ABC's contribution. Record ID#104624 captures CCB's contribution.